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Contents

Advantage India

Market overview

Industry Infrastructure

Investments

Policy and regulatory framework

Opportunities

Industry associations

AGRICULTURE April 2010


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The increase in food grain production from 50.8 million tonnes in 195051 to 234.5 million tonnes in200809, can be largely attributed to the Green Revolution, which took place in the 1960s. Agriinput, including fertilisers, high yielding varieties (HYVs) of crops, pesticides, surface irrigation andmechanised farming, has been primarily responsible for the growth in agricultural productivity.

Market overview (1/11)

Agriculture April 2010MARKET OVERVIEW

Growth of food grain production in India

50.8

82.0108.4

129.6

176.4196.8

234.556.7%52.5%

46.0%39.9%

34.0%

26.2%

15.7%

0%

10%

20%

30%

40%

50%

60%

0

50

100

150

200

250

195051 196061 197071 198081 199091 200001 200809

S h

a r e

of

a g r i c

ul t ur e

a nd a l l i ed

s er v i c

e s

i n GDP

Food grain production (million tonnes) Percentage share of agriculture and allied services in GDP

Sources: Handbook of Statistics on the Indian Economy 2008-09, Reserve Bank of India website, http://www.rbi.org.in/home.aspx accessed 18 January 2010; Second Advance Estimates of Production of Foodgrains for 200910,http://dacnet.nic.in/eands/Advance_Estimate/2ndAdvance_Estimates_2009-10(English).pdf accessed 08 March 2010; Dr R Albert ChristopherDhas, Agricultural Crisis in India: The Root Cause and Consequences, The American College, Madurai; Economic Survey 20092010
http://dacnet.nic.in/eands/Advance_Estimate/2ndAdvance_Estimates_2009-10(English).pdfhttp://dacnet.nic.in/eands/Advance_Estimate/2ndAdvance_Estimates_2009-10(English).pdfhttp://dacnet.nic.in/eands/Advance_Estimate/2ndAdvance_Estimates_2009-10(English).pdfhttp://dacnet.nic.in/eands/Advance_Estimate/2ndAdvance_Estimates_2009-10(English).pdf


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Sources: Handbook of Statistics on the Indian Economy 2008-09, Reserve Bank of India website, http://www.rbi.org.in/home.aspx accessed 18 January 2010; Second Advance Estimates of Production of Foodgrains for 200910,http://dacnet.nic.in/eands/Advance_Estimate/2ndAdvance_Estimates_2009-10(English).pdf accessed 08 March 2010; Dr R Albert ChristopherDhas, Agricultural Crisis in India: The Root Cause and Consequences, The American College, Madurai; Economic Survey 20092010

The shift from agriculture to a services and industry-driven economy has resulted in a decline in theshare of agriculture and allied services in Indias GDP from more than 50 per cent in 195051 to 15.7per cent in 200809.


http://dacnet.nic.in/eands/Advance_Estimate/2ndAdvance_Estimates_2009-10(English).pdfhttp://dacnet.nic.in/eands/Advance_Estimate/2ndAdvance_Estimates_2009-10(English).pdfhttp://dacnet.nic.in/eands/Advance_Estimate/2ndAdvance_Estimates_2009-10(English).pdfhttp://dacnet.nic.in/eands/Advance_Estimate/2ndAdvance_Estimates_2009-10(English).pdfhttp://dacnet.nic.in/eands/Advance_Estimate/2ndAdvance_Estimates_2009-10(English).pdfhttp://dacnet.nic.in/eands/Advance_Estimate/2ndAdvance_Estimates_2009-10(English).pdf


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Sources: First Advance Estimates of Production of Food grains for 200910, Department of Agriculture & Cooperation, Ministry of Agriculture, Government of India, http://dacnet.nic.in/eands/latest_2006.htm accessed 18 January 2010; Second Advance Estimates of Production of Foodgrains for 20092010, http://dacnet.nic.in/eands/Advance_Estimate/2ndAdvance_Estimates_2009-10(English).pdf accessed 08 March 2010*Final estimate

Kharif and Rabi seasons

India has two crop seasons, Kharif and Rabi , based on the dependence of crop productivity on the monsoons.The Kharif season is during the summer months and monsoons, lasting from April to September, and the maincrop grown during this season is rice. The Rabi season is during the winter months of October to March, andthe main crop grown is wheat.


Agriculture April 2010

India Kharif and Rabi (production in million tonnes)

48.1% 47.3% 50.1% 45.1% 47.9% 47.3% 49.1% 47.6% 49.6%

51.9% 52.7% 49.9% 54.9% 52.1% 52.7% 50.9% 52.4% 50.4%

0%

20%

40%

60%

80%

100%

200001 200102 200203 200304 200405 2 00 5 06 200607 200708 200809*

Kharif Rabi

196.8 212.9 174.8 213.2 198.4 208.6 217.3 230.8 234.5

MARKET OVERVIEW


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Sources: First Advance Estimates of Production of Food grains for 200910, Department of Agriculture & Cooperation, Ministry of Agriculture, Government of India, http://dacnet.nic.in/eands/latest_2006.htm accessed 18 January 2010; Second Advance Estimates of Production of Foodgrains for 20092010, http://dacnet.nic.in/eands/Advance_Estimate/2ndAdvance_Estimates_2009-10(English).pdf accessed 08 March 2010*Final estimate

According to the final estimates of the Agricultural Statistics Division, Government of India, production of food grains in 200809 was estimated to be 234.47 million tonnes, with the Kharif crops accounting for118.14 million tonnes and the Rabi crops for 116.33 million tonnes. According to the second advancedestimates of the Agricultural Statistics division, production of food grains in 20092010 is estimated to be216.85 million tonnes.




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Sources: Area, Production and Yield of Principal Crops, Department of Agriculture & Cooperation, Ministry of Agriculture, Government of India, http://dacnet.nic.in/eands/latest_2006.htm accessed 18 January 2010; Second Advance Estimates of Production of Foodgrains for 2009-10,http://dacnet.nic.in/eands/Advance_Estimate/2ndAdvance_Estimates_2009-10(English).pdf accessed 08 March 2010; Handbook of Statistics on the IndianEconomy 2008-09, Reserve Bank of India website, www.rbi.org.in*Final Estimates FY09 as released on 12 February 2010; Note: For cotton production is in million bales of 170 kg each

Over the 50-year period, i.e. , from 195051 to 200809, Indias production of rice and wheat has grown ata CAGR of approximately 2.7 per cent and 4.4 per cent, respectively. The countrys production of maizeand cotton has grown at a CAGR of 4.3 per cent and 3.5 per cent, respectively, over the same period.


Key crop varieties in India


Production (million tonnes)

154.3

53.636.3

9.4 7.0 7.0 0.4

241.1

74.355.1

18.6 9.8 9.0 2.6

285.0

99.280.7

27.7 22.3 19.7 9.90

50

100

150

200

250

300

Sugarcane Rice Wheat Nine-oilseeds Cotton Maize Soyabean

198081 199091 200809*

MARKET OVERVIEW
http://dacnet.nic.in/eands/latest_2006.htmhttp://dacnet.nic.in/eands/Advance_Estimate/2ndAdvance_Estimates_2009-10(English).pdfhttp://www.rbi.org.in/http://www.rbi.org.in/http://dacnet.nic.in/eands/Advance_Estimate/2ndAdvance_Estimates_2009-10(English).pdfhttp://dacnet.nic.in/eands/Advance_Estimate/2ndAdvance_Estimates_2009-10(English).pdfhttp://dacnet.nic.in/eands/Advance_Estimate/2ndAdvance_Estimates_2009-10(English).pdfhttp://dacnet.nic.in/eands/latest_2006.htm


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Sources: Area, Production and Yield of Principal Crops, Department of Agriculture & Cooperation, Ministry of Agriculture, Government of India, http://dacnet.nic.in/eands/latest_2006.htm accessed 18 January 2010; Second Advance Estimates of Production of Foodgrains for 2009-10,http://dacnet.nic.in/eands/Advance_Estimate/2ndAdvance_Estimates_2009-10(English).pdf accessed 08 March 2010; Handbook of Statistics onthe Indian Economy 2008-09, Reserve Bank of India website, www.rbi.org.in*Final Estimates FY09 as released on 12 February 2010; Note: For cotton production is in million bales of 170 kg each

The yield of crops has witnessed significant growth since the Green Revolution. From 195051 to200809, the countrys yield of rice and wheat has grown by 3.3 and 4.4 times, to reach 2,186 kg/ha and2,891 kg/ha, respectively. The yield of sugarcane has doubled since 195051 to reach about 62,000 kg/hain 200809.




MARKET OVERVIEW
http://dacnet.nic.in/eands/latest_2006.htmhttp://dacnet.nic.in/eands/Advance_Estimate/2ndAdvance_Estimates_2009-10(English).pdfhttp://www.rbi.org.in/http://www.rbi.org.in/http://dacnet.nic.in/eands/Advance_Estimate/2ndAdvance_Estimates_2009-10(English).pdfhttp://dacnet.nic.in/eands/Advance_Estimate/2ndAdvance_Estimates_2009-10(English).pdfhttp://dacnet.nic.in/eands/Advance_Estimate/2ndAdvance_Estimates_2009-10(English).pdfhttp://dacnet.nic.in/eands/latest_2006.htm


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Sources: Agricultural Statistics At a Glance 2008," Department of Agriculture & Cooperation, Ministry of Agriculture, Government of India, http://dacnet.nic.in/eands/latest_2006.htm accessed 18 January 2010 ; Agriculture and Food Management, Economic Survey 2009-10, Governmentof India: Union Budget and Economic Survey, http://indiabudget.nic.in/es2009-10/esmain.htm accessed 08 March 2010* Fourth Advance estimates

The principal crops in India are rice, wheat, jowar, bajra, maize, pulses, nine oilseeds, soyabean, sunflower, cotton, jute, mesta and sugarcane.




34.6 42.253.6 74.3 85.0 99.2

1,013 1,123

1,3361,740 1,901

2,186

0

500

1,000

1,500

2,000

2,500

0

20

4060

80

100

120

Y i el d

Production (million tonnes) Yield (kg/hectare)

11.0 23.836.3 55.1

69.7 80.68511,307 1,630

2,281

2,708 2,891

0

1,000

2,000

3,000

4,000

0

2040

60

80

100

Y i el d


Wheat production and yield Rice production and yield

MARKET OVERVIEW

W h e a t p r o d u c t i o n

R i c e p r o d u c t i o n
http://dacnet.nic.in/eands/latest_2006.htm%20accessed%2018%20January%202010http://indiabudget.nic.in/es2009-10/esmain.htmhttp://indiabudget.nic.in/es2009-10/esmain.htmhttp://dacnet.nic.in/eands/latest_2006.htm%20accessed%2018%20January%202010


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Sources: Agricultural Statistics At a Glance 2008," Department of Agriculture & Cooperation, Ministry of Agriculture, Government of India, http://dacnet.nic.in/eands/latest_2006.htm accessed 18 January 2010 ; Agriculture and Food Management, Economic Survey 2009-10, Governmentof India: Union Budget and Economic Survey, http://indiabudget.nic.in/es2009-10/esmain.htm accessed 08 March 2010* Fourth Advance estimates

The growth in production has been primarilydue to the introduction of high yieldingvarieties (HYVs) of crops.



Area under cultivation (million hectares)

12.918.2

22.3 24.225.7 27.9

34.137.6 40.2

42.7 44.7 45.4

0

1020

30

40

50

196061 197071 198081 199091 200001 200809*Rice Wheat


MARKET OVERVIEW
http://dacnet.nic.in/eands/latest_2006.htm%20accessed%2018%20January%202010http://indiabudget.nic.in/es2009-10/esmain.htmhttp://indiabudget.nic.in/es2009-10/esmain.htmhttp://indiabudget.nic.in/es2009-10/esmain.htmhttp://indiabudget.nic.in/es2009-10/esmain.htmhttp://dacnet.nic.in/eands/latest_2006.htm%20accessed%2018%20January%202010


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Source: Agricultural Statistics At a Glance 2008," Department of Agriculture & Cooperation, Ministry of Agriculture, Government of India,http://dacnet.nic.in/eands/latest_2006.htm accessed 18 January 2010 ; Agriculture and Food Management, Economic Survey 2009-10, Government of India:Union Budget and Economic Survey, http://indiabudget.nic.in/es2009-10/esmain.htm accessed 08 March 2010* Fourth Advance estimatesNote: For cotton, production is in million bales of 170 kg each




4.1 7.5 7.0 9.0 12.0 19.3

92 6 1,279 1,1591,518

1,8222355

0

50 0

1,000

1,500

2,000

2,500

0

5

10

15

20

25

Y i el d


5.6 4.8 7.09.8 9.5

23.2125 106 152

225 190

419

0

100

200

300

400

500

0

5

10

15

20

25

Y

i el d

Production (mi ll ion tonnes) Yield (kg/hectare )

Maize production and yield Cotton production and yield

MARKET OVERVIEW

M a i z e p r o d u c t i o n

C o t t o n p r o d u c t i o n
http://dacnet.nic.in/eands/latest_2006.htm%20accessed%2018%20January%202010http://indiabudget.nic.in/es2009-10/esmain.htmhttp://indiabudget.nic.in/es2009-10/esmain.htmhttp://dacnet.nic.in/eands/latest_2006.htm%20accessed%2018%20January%202010


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Source: Handbook of Statistics on the Indian Economy 2008-09, Reserve Bank of India website, http://www.rbi.org.in/home.aspx accessed 18 January 2010Note: Total production does not include production in Union Territories

In India, 10 states account for approximately 80per cent of the countrys total food grainproduction.

In 200708, West Bengal was the leading producerof rice in India, accounting for about 15.2 per centof the total production, followed by AndhraPradesh, Uttar Pradesh, Punjab and Orissa.

In 2007-08, Uttar Pradesh was the leadingproducer of wheat, accounting for 32.7 per centof the total wheat production, followed byPunjab, Haryana, Rajasthan, Madhya Pradesh andBihar.

In 200708, Uttar Pradesh was the leadingproducer of sugarcane in the country, accountingfor 35.8 per cent of the total production, followedby Maharashtra, Tamil Nadu, Karnataka, AndhraPradesh and Gujarat.

Market overview (11/11)Leading food grain-producing states in India


21.7% 18.3%

12.9%11.6%

8.2%8.4%

5.1%7.0%

7.0%7.0%

6.8%6.6%

5.2% 6.6%

5.6% 5.3%

5.2% 5.2%

6.1%4.7%

16.3% 19.3%

200101 200708

196.6 MT 230.5 MT

Uttar Pradesh

Punjab

Andhra Pradesh

RajasthanWest Bengal

Haryana

MaharashtraKarnataka

Madhya PradeshBihar

Other

Share of states in food grain production

MARKET OVERVIEW
http://www.rbi.org.in/home.aspxhttp://www.rbi.org.in/home.aspx


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Source: Agricultural Statistics At a Glance 2008," Department of

Agriculture & Cooperation, Ministry of Agriculture, Governmentof India, http://dacnet.nic.in/eands/latest_2006.htm accessed 18

January 2010P Provisional

EXIM scenario (1/4)

Over the period 199091to 200708, the valueof Indias agricultural imports and exports hasgrown at a CAGR of 20.8 per cent and 16.3 percent, to reach US$ 6.2 billion (INR 297.8 billion)and US$ 16.2 billion (INR 777.7billion), respectively.


Indias agri imports and exports (US$ billion)

7.58.1

9.010.7

13.6

16.9

3.84.8 5.0 4.7

6.4 6.5

02468

1012141618

200203 200304 200405 200506 200607 200708P

Exports Imports

MARKET OVERVIEW
http://dacnet.nic.in/eands/latest_2006.htmhttp://dacnet.nic.in/eands/latest_2006.htm


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Source: Agricultural Statistics At a Glance 2008," Department of Agriculture & Cooperation, Ministry of Agriculture, Governmentof India, http://dacnet.nic.in/eands/latest_2006.htm accessed 18

January 2010P Provisional

EXIM scenario (2/4)

India is a net exporter of agricultural products.However, it faces challenges related to trade-distorting subsidies, tariffs and trade barriers.


Agri imports and exports as a percentage of total national exports and imports

13.612.7

11.1 10.8 10.912.2

5.9 6.14.6

3.3 3.5 3.1

0

2

4

6

810

12

14

16

200203 200304 200405 200506 200607 200708P

Percentage of agri exports to total national imports

Percentage of agri imports to total national imports

MARKET OVERVIEW


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Source: Agricultural Statistics At a Glance 2008," Department of Agriculture & Cooperation, Ministry of Agriculture, Government of India, http://dacnet.nic.in/eands/latest_2006.htm accessed 18 January2010

EXIM scenario (3/4)

In 200809, Indias export of cerealsamounted to US$ 3.29 million, with SaudiArabia, the UAE, and Malaysia being itsleading export destinations. Rice (basmatiand non-basmati) and other cereals werethe leading cereals exported from thecountry.


10.3%

10.2%

9.5%

8.8%

6.9%

6.3%

5.6%

5.4%

36.9%

Cotton raw including waste

Oil meals

Rice (other than basmati)

Marine products

Sugar

Paper/wood products

Rice basmati

Spices

Other

100%= US$16.9 billion

Key agri products exported by India, 200708*(US$ billion)

MARKET OVERVIEW


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Source: Agricultural Statistics At a Glance 2008," Department of Agriculture & Cooperation, Ministry of Agriculture, Governmentof India, http://dacnet.nic.in/eands/latest_2006.htm accessed 18

January 2010

EXIM scenario (4/4)

Vegetable oil is a leading agricultural productimported by India from developing countriessuch as Malaysia and Indonesia.


34.6%

18.3%

17.7%

8.9%

20.4%

Vegetable oils fixed(edible)

Wood and woodproducts

Pulses

Wheat

Other

100%= US$6.5 billion

Key agri products imported by India, 200708*(US$ billion)

MARKET OVERVIEW


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Growth drivers (1/2)

Growth in populationand wealth

Land and irrigation

Fertilisers

With a population of more than a billion, India has a huge domestic demand for agri products. Althoughfood deficit declined from 290 kcal/person/day in 199092 to 260 kcal/person/day in 2004-06, there is achallenge with respect to meeting the total demand for food. Indias economic growth has, however, putinto motion factors such as increasing private final consumption expenditure and disposableincomes, which have driven the agricultural sector.

Land under cultivation in India has continued to rise since the 1950s, and more than 50 per cent of thecountrys workforce is engaged in agriculture and allied activities. In 200506, its gross irrigated areastood at 82.6 million hectares, as compared to 28.0 million hectares in 196061.

Fertilisers comprise a key agri input, which has resulted in higher production of crops and yield. Fertiliserconsumption per hectare has grown by leaps and bounds, with consumption increasing from 0.55 kg/hain 1950 to more than 125 kg/ha in 2009.



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Growth drivers (2/2)

Mechanisation

Institutional credit

Seeds

The Indian farmer has adopted modern agricultural techniques, such as the use of tractors and tillers.The farm power used in India has grown by five times to 1.502 kW/ha in 200506 from 0.0295 kW/ha in197172, decreasing the contribution of human power from 15 per cent in 197172 to 5.8 per cent in200506.

HYV seeds and an organised seed sector have been instrumental in driving agricultural productivityacross the country. The area under certified seed cultivation in India has grown from less than 500hectares in 196263 to more than 0.5 million hectares in 19992000, boosting the productivity of agriproducts.

Institutional credit has reduced the role of traditional money lenders in the Indian agriculturalsector, thereby creating an organised credit market. The share of institutional credit, which stood atapproximately 7 per cent in 1951, grew to more than 60 per cent in 2002, while that of non-institutionalcredit, which primarily comprises money lenders, declined to approximately 40 per cent in 2002 from92.7 per cent in 1951.



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India has the second-highest population in theworld, accounting for more than one-sixth of the worlds population. The need to feed morethan a billion people is a driving force fordomestic agriculture.

Growth drivers population and wealth (1/2)

Source: Handbook of Statistics on the Indian Economy 2008-09,Reserve Bank of Indiawebsite, http://www.rbi.org.in/home.aspx , accessed 18 January2010


India population (million)

359.0434.0

541.0

679.0

839.0

1,019.0

1,154.0

0

200

400

600

800

1,000

1,200

1,400

195051 196061 197071 198081 199091 200001 200809

MARKET OVERVIEW


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Indias PFCE has been boosted by economicreforms, which began in the 1990s. The growth inits PFCE has resulted in the growth of itsagriculture sector.

Growth drivers population and wealth (2/2)

Source: Handbook of Statistics on the Indian Economy 2008-09,Reserve Bank of Indiawebsite, http://www.rbi.org.in/home.aspx , accessed 18 January 2010

100.0 169.2 409.6 1,245.44,192.9

14,897.4

32,407.0

100.0

5,100.0

10,100.0

15,100.0

20,100.0

25,100.0

30,100.0

35,100.0

1950511960611970-71 1980-81 1990-91 2000-01 2008-09

Values indexed to 100 as of 195051


India private final consumption expenditure (PFCE)

MARKET OVERVIEW


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Sources: "Agricultural Statistics At a Glance 2008," Department of Agriculture & Cooperation, Ministry of Agriculture, Government of India, http://dacnet.nic.in/eands/latest_2006.htm accessed 18 January 2010; P.Kataria and A.S.Joshi, Energy Use in Indian Agriculture, Departmentof Economics, Punjab Agricultural University, Ludhiana, IndiaP Provisional

Growth drivers agricultural land in India

India ranks seventh in the world in terms of its total geographic area. In 2005, agricultural land as apercentage of total land in the country stood at 57.1 per cent, in comparison to the world average of 11.9 per cent. Indias irrigated area has grown at a steady pace since the Green Revolution, with groundwater irrigating approximately 64 per cent of the net irrigated area in 200304.


152.8165.8

172.6185.7 185.4

192.8

133.2140.3 140.0 143.0 141.4 141.9

0

25

50

7510 0

12 5

15 0

17 5

20 0

22 5

196061 197071 198081 199091 200001 200506P

Total cropped area Net area sown

Land use (million hectares)

MARKET OVERVIEW


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Sources: "Agricultural Statistics At a Glance 2008," Department of Agriculture & Cooperation, Ministry of Agriculture, Government of India, http://dacnet.nic.in/eands/latest_2006.htm accessed 18 January 2010; P.Kataria and A.S.Joshi, Energy Use in Indian Agriculture, Department of Economics, Punjab Agricultural University, Ludhiana, India; Agriculture and Food Management, Economic Survey 2009-10P Provisional

Growth drivers improved irrigation facilities in India

The government has taken several initiatives through its Five Year Plans to improve irrigation facilities inIndia. The Working Group on Water Resources for the Eleventh Plan has proposed the creation of irrigationpotential for16 million hectares during the Eleventh Plan period. The total arable land in the country grewfrom 81.1 million hectares in 199192 to 102.77 million hectares in March 2007.


28.0

38.2

49.8

63.2

76.6

82.6

24.7

31.1

38.7

48.0

55.1

60.2

0

10

20

30

40

50

60

70

80

90

196061 197071 198081 199091 200001 200506P

Gross irrigated area Net irrigated area

Irrigated area (million hectares)

MARKET OVERVIEW


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Sources: Annual Report 200809, Department of Agriculture &Cooperation, Ministry of Agriculture, Government of India, http://agricoop.nic.in/AnnualReport08-

09/Agriculture%20English%20book.pdf accessed 18 January 2010;P.Kataria and A.S.Joshi, Energy Use in Indian Agriculture, Departmentof Economics, Punjab Agricultural University, Ludhiana, India

Growth drivers mechanisation of Indian agriculture (1/2)

The country has witnessed a surge in the saleof tractors and power tillers. In 2005, Indiawas ranked second in the world, and was nextto the US in terms of tractor usage.


0.30 0.47

0.76

1.231.50

0.0

0.5

1.0

1.5

2.0

197172 198182 199192 200102 200506

CAGR(200408)4.8%

Farm power in India (kW/ha)

MARKET OVERVIEW
http://agricoop.nic.in/AnnualReport08-09/Agriculture%20English%20book.pdfhttp://agricoop.nic.in/AnnualReport08-09/Agriculture%20English%20book.pdfhttp://agricoop.nic.in/AnnualReport08-09/Agriculture%20English%20book.pdfhttp://agricoop.nic.in/AnnualReport08-09/Agriculture%20English%20book.pdfhttp://agricoop.nic.in/AnnualReport08-09/Agriculture%20English%20book.pdf


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Sources: Annual Report 200809, Department of Agriculture & Cooperation, Ministry of Agriculture, Government of India, http://agricoop.nic.in/AnnualReport08-09/Agriculture%20English%20book.pdf accessed 18 January 2010; P.Kataria and A.S.Joshi, Energy Use inIndian Agriculture, Department of Economics, Punjab Agricultural University, Ludhiana, India

Growth drivers mechanisation of Indian agriculture (2/2)

Indian agriculture has moved towards mechanisation after the success of the GreenRevolution.

Farm power used in India increased by five times to 1.502 kW/ha in 200506 from 0.0295kW/ha in 197172, decreasing the contribution of human power from 15 per cent in197172 to 5.8 per cent in 200506.


190,336247,531

296,080352,781 346,501

0

100,000

200,000

300,000

400,000

500,000

200304 200405 200506 200607 200708

15665 1748122303 24791

26135

05,000

10,00015,00020,00025,00030,00035,000

200304 200405 200506 200607 200708

CAGR(200408)16.2% CAGR(200408)

13.7%

Sale of tractors Sale of power tillers

N o o

f u n

i t s

N o o

f u n

i t s

MARKET OVERVIEW
http://agricoop.nic.in/AnnualReport08-09/Agriculture%20English%20book.pdfhttp://agricoop.nic.in/AnnualReport08-09/Agriculture%20English%20book.pdfhttp://agricoop.nic.in/AnnualReport08-09/Agriculture%20English%20book.pdfhttp://agricoop.nic.in/AnnualReport08-09/Agriculture%20English%20book.pdf


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Source: Annual Report 200809, Department of Agriculture & Cooperation, Ministry of Agriculture, Government of India, http://agricoop.nic.in/AnnualReport08-09/Agriculture%20English%20book.pdf accessed 18 January 2010; National Seeds Policy*Anticipated

Growth drivers role of seeds in Indian agriculture

HYV seeds have played a prominent role in the growth of the Indian agriculture sector, resulting in higherproduction of foodgrains. During the Green Revolution , the Indian Council for Agricultural Research

(ICAR)developed new strains of HYV seeds and focussed mainly on wheat and rice. The Seeds Act, 1966, and the New Policy on Seeds Development, 1988, form the basis for the promotion

and regulation of the Indian seed industry. The objective of the National Seeds Policy is to create afavourable climate for the seed industry, safeguard the interests of Indian farmers and conserve agro-biodiversity.


69.0 74.079.7

85.396.9

6.6 6.9 7.4 9.2 10.0

0

20

40

60

80

100

120

200405 200506 200607 200708 200809*

Foundation seed production Breeder seed production

1,550.1

1,790.51,900.0

0

500

1,000

1,500

2,000

2,500

200607 200708 200809*

Seed production (billion tonnes) Certified/quality seed distribution (billion tonnes)

MARKET OVERVIEW
http://agricoop.nic.in/AnnualReport08-09/Agriculture%20English%20book.pdfhttp://agricoop.nic.in/AnnualReport08-09/Agriculture%20English%20book.pdf


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Sources: Flow of institutional credit to agriculture and allied activities, Economic Survey 200809; Ramesh Golait, Current Issues in AgricultureCredit in India: An Assessment, Summer 2007, Reserve Bank of India Occasional Papers, RBIwebsite, http://rbidocs.rbi.org.in/rdocs/Publications/PDFs/82933.pdf , accessed 18 January 2010P Provisional

Growth drivers improved agricultural credit

Institutional credit from commercial banks, cooperative societies and banks, as well as regional ruralbanks, has grown at a CAGR of about 25 per cent between 200203 and 200809.

In 200809, the amount disbursed by all banks (including cooperative and regional rural banks) foragriculture and allied activities stood at US$ 55.09 billion (INR 2,644.6 billion), with commercial banksaccounting for approximately three-fourth of the amount disbursed.


57.2% 60.3% 65.0%69.5% 72.6% 71.1% 76.7%

34.1% 31.0% 25.1%22.0% 18.5% 19.0% 13.5%

8.7% 8.7% 9.9% 8.4% 8.9% 9.9% 9.8%

200203 200304 200405 200506 200607 200708 200809PCommercial banks Cooperative banks RRBs

100%=US$ billion 15.1 18.9 27.2 39.2 49.9 55.4 57.5

Flow of institutional credit to agriculture and allied activities (US$ billion)

MARKET OVERVIEW
http://rbidocs.rbi.org.in/rdocs/Publications/PDFs/82933.pdfhttp://rbidocs.rbi.org.in/rdocs/Publications/PDFs/82933.pdf


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Contents

Advantage India

Market overview


Investments


Opportunities




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Industry infrastructure Agriculture Export Zones (AEZs)

(1/2)State AEZ Focus Products

Andhra Pradesh Mango pulp, fresh vegetables, grapes,mangoes, gherkins, chillies

Assam Fresh and processed ginger

Bihar Litchis

Gujarat Mangoes, vegetables, dehydrated onions,sesame seeds

Himachal Pradesh Apples

Jammu & Kashmir Apples and walnuts

Jharkhand Vegetables

Karnataka Gherkins, rose onions, flowers, vanilla

Kerala Horticulture products, medicinal plants

Madhya Pradesh Potatoes, onions, garlic, seed spices, wheat,lentils, grams, oranges

MaharashtraGrapes and grape wine, mangoes includingKesar mango, flowers, onions,pomegranate, banana, oranges

Orissa Ginger and turmeric

State AEZ Focus Products

Punjab Vegetables, potatoes, basmati rice

Rajasthan Coriander, cumin

Sikkim Ginger, flowers (orchids) andcherry pepper

Tamil Nadu Flowers, mangoes, cashew nuts

Tripura Pineapples

Uttar Pradesh Potatoes, mangoes, vegetables,basmati rice

Uttaranchal Basmati rice, litchis, flowers,medicinal and aromatic plants

West Bengal Pineapples, litchis, potatoes,

mangoes, vegetables, Darjeeling tea

Agriculture April 2010INDUSTRY INFRASTRUCTURE


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Industry infrastructure Agriculture Export Zones (AEZs)

(2/2)

Source: Agri Export Zones of India, APEDA website, www.apeda.com, accessed 29 December 2009

Distribution of AEZs among states


Total number of AEZs in India is

60

8

6

5

5

4

4

4

4

20

Maharashtra

West Bengal

Andhra Pradesh

Madhya Pradesh

Karnataka

Uttaranchal

Uttar Pradesh

Tamil Nadu

Others

Distribution of AEZs among states

INDUSTRY INFRASTRUCTURE


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Advantage India

Market overview


Investments


Opportunities




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Investments (1/3)

The sector has transformed from pure agriculture to agribusiness, providing value to eachstakeholder in the farm-to-fork value chain. In the recent past, the sector has witnessedinvestments from the corporate sector in the form of organic and contract farming, and set up of hubs for procurement of farm produce.

Investment by private players

In July 2007, Cadbury India Ltd and the Tamil Nadu Horticulture Department entered an agreement to promote cocoa farming.The five-year agreement aims to bring 50,000 acres under cocoa farming, which will provide coconut farmers an additionalincome of US$ 1.66 million (INR 80 million) a year.

In August 2006, Reliance Retail entered an agreement with the Punjab government for agricultural and retail projects entailingan initial investment of US$ 104.16 million (INR 5.0 billion). The company plans to set up rural hubs for procurement of vegetables, fruits, pulses and other farm produces.

Agriculture April 2010INVESTMENTS


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Investments (3/3)

Cumulative FDI inflows

Period: April 2000 to January 2010

SectorAmount of FDI inflows

(US$ million)

Agriculture services 1,496.76

Fermentation industries 767.72

Agricultural machinery 149.31

Vegetable oils and vanaspati 129.82

Tea and coffee 89.14

Sugar 41.68

Source: Fact Sheet On Foreign Direct Investment(FDI), Department of Industrial Policy andPromotion, www.dipp.nic.in,, accessed 29 April 2010

Total investment in the agriculture and alliedsectors in 200809 amounted to US$ 28.87 billion(INR 1,386 billion), of which the private sectoraccounted for 82 per cent (US$ 23.78 billion).

Source: Socio Economic Survey, 20092010

Agriculture April 2010INVESTMENTS


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Advantage India

Market overview


Investments


Opportunities




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Policy and regulatory framework (1/6)

The various ministries within the Government of India and other agencies responsiblefor the development of the agricultural sector include

Ministry of Food Processing Industries

Department of Agriculture & Cooperation (National Horticulture Board) Department of Animal Husbandry, Dairying and Fisheries

Ministry of Commerce and Industry (commodity boards for rubber, coffee, tea and spices)

National Dairy Development Board (NDDB)

Agriculture April 2010POLICY AND REGULATORY FRAMEWORK


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FDI policy

100 per cent FDI is allowed under the automatic route in floriculture, horticulture, development of seeds, cultivation of vegetables and mushrooms under uncontrolled conditions and services related to theagriculture and allied sectors.

100 per cent FDI is allowed in the tea sector, including tea plantations, under the governmentroute, subject to the following conditions:

Compulsory divestment of 26 per cent equity of the company in favour of an Indian partner/thepublic within a period of five years.

Prior approval of the state government, in the event of any future land use change.

Agriculture April 2010POLICY AND REGULATORY FRAMEWORK


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Government initiatives2. Rashtriya KrishiVikasYojana (RKVY)RKVY was launched in 2007 to achieve the objective of attaining 4 per cent growth in the agricultural sectorduring the Eleventh Plan Period.The key objectives of the scheme include

To incentivise states to increase public investment in agriculture and allied sectors

To ensure the preparation of agriculture plans in the districts and states, based on agro-climaticconditions, and the availability of technology and natural resources

To maximise returns to farmers engaged in the agriculture and allied sectors

To bring about quantifiable changes in the production and productivity of various components of agricultureand allied sectors by addressing them in a holistic manner


Sources: Department of Agriculture and Cooperation, Department of Industrial Policy and Promotion

POLICY AND REGULATORY FRAMEWORK


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Source: Share of Public Sector Outlays and Expenditure under Agriculture and Allied Activities during Ninth Plan, Tenth Plan, and Eleventh Plan,Department of Agriculture & Cooperation, Ministry of Agriculture, Government of India, http://dacnet.nic.in/eands/At_Glance_2008/Agriculture_new.html accessed 18 January 2010


India aims at achieving food self-sufficiency, with afocus on expanding its cultivated and irrigatedarea, implementing land reforms, adopting HYV

crops, promoting increased use of chemicalfertilisers and pesticides, and restructuring ruralcredit institutions, and community development.

In 2000, the government announced its firstcomprehensive agricultural policy statement theNational Agricultural Policy (NAP). The NAP aimsto achieve an annual growth rate of 4 per cent inthe agricultural sector over the next two decades.


9.212.8

29.64.9%

3.9%

3.7%

0%

1%

2%

3%

4%

5%

6%

0

5

10

15

20

25

30

35

Ninth Plan(19972002)

Tenth Plan(200207)

Eleventh Plan(20072012)

Plan Outlays

Percentage share of agriculture and allied activitiesto total ou tlay

Public sector outlays and expenditure underagriculture and allied activities (US$ billion)

POLICY AND REGULATORY FRAMEWORK
http://dacnet.nic.in/eands/At_Glance_2008/Agriculture_new.htmlhttp://dacnet.nic.in/eands/At_Glance_2008/Agriculture_new.html


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Market overview


Investments


Opportunities




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Opportunities

Opportunities

Source: Working Paper No 209: Demand-Supply Trends and Projections of Food in India, Indian Council For Research on International EconomicRelations (ICRIER), http://www.icrier.org/ accessed 22 January 2010

Indias population is projected to reach approximately 1.6billion in 2050, creating a huge domestic demand foragricultural products.

Agriculture is expected to be a focal point for the privatesector in the country, since several private players are

expected to venture into organic and contractfarming, and set up hubs to procure farm produce.

Significant investments are expected in supply chaintechnology and cold storage facilities.

Contract farming is expected to gain ground. This is anagreement between the food processor(contractor), typically a large organised player, and thefarmer, whereby the latter is contracted to plant and

produce the formers crop on his land.

Agriculture April 2010OPPORTUNITIES

209.7

242.2 260.2

188.5

245.1

277.2

0

50

10 0

15 0

20 0

25 0

30 0

35 0

2011P 2021P 2026P

Demand Supply

Demandsupply gap of cereals in India (MT)

l
http://www.icrier.org/http://www.icrier.org/


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Contents

Advantage India

Market overview


Investments


Opportunities



INDUSTRY ASSOCIATIONS


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Industry associations (1/3)

Autonomous Bodies National Institute of Agricultural Extension Management (MANAGE)

Rajendranagar, Hyderabad500 030, Andhra PradeshPhones: 040-24016702 to 706Fax: 040-24015388

National Institute of Agricultural Marketing (NIAM)Bambala, Kota Road

Jaipur302033, RajasthanPhone: 0141-2770027Fax: 0141-2771938, 2770027

Agriculture April 2010INDUSTRY ASSOCIATIONS



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Boards Central Insecticides Board and Registration Committee

Machinary Store Building,N.H.IV FaridabadPhone: 0129 -2413002

Coconut Development BoardKera Bhavan, SRVHS Road, KochiKerala682011Phone: 0484-2376265, 2377267, 2376553Fax: 0484-2377902

National Dairy Development Board (NDDB)PB No 40, Anand388 001Phone: 02692-260148/260149/260160Fax: 02692-260157




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Boards

National Horticulture Board (NHB)Ministry of Agriculture, Government of India85, Institutional Area, Sector-18Gurgaon122015, Haryana

National Oilseeds and Vegetable Oils Development Board (NOVOD)86, Institutional Area, Sector-18Gurgaon122015, Haryana

Councils Indian Council of Agricultural Research (ICAR)

Krishi Bhavan, New Delhi 110 114


NOTE


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Wherever applicable, numbers in the report have been rounded off to the nearest whole number.

Conversion rate used: US$ 1= INR 48

Note

Agriculture April 2010NOTE



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